The dependence of growth on the profitability of capital in the Kaleckian literature: a critical evaluation

Kaleckian models can be considered as the most relevant set of theoretical works which study growth as a demand-led phenomenon. In these models, the pace of accumulation depends on demand expansion and on different measures of capital profitability. The relevance of the latter is generally assumed without any in-depth scrutiny of theoretical principles. This article identifies the theoretical underpinnings of this alleged dependence and reconsiders and develops the criticisms of them which can be found in the literature. This analysis leads to argue that this fundamental assumption of the Kaleckian models is not sufficiently argued as much as its cruciality would require. In particular, we will critically review the following assumptions: (i) the identification between the expected rate of profit and the realized rate of profit, (ii) the role of the normal (and therefore expected) rate of profit as a quantitative regulator of the amount of investment, (iii) the automatic identification between the possibiliti